Now that the CARES Act has established the $349 billion Paycheck Protection Program, the Small Business Administration has begun working with U.S. Treasury Secretary Steven T. Mnuchin to mobilize banks and other lending institutions to provide small businesses with the capital they need. The new loan program will help small businesses with their payroll and other operating expenses, providing critical capital without collateral requirements, personal guarantees, or fees.
The new loan program will be available retroactive from February 15 so employers can rehire their recently laid-off employees through June 30. In addition, loan payments will be deferred for six months, and the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.
“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly. Our goal is to position lenders as the single point-of-contact for small businesses—the application, loan processing, and disbursement of funds will all be administered at the community level,” said SBA Administrator Jovita Carranza, in a statement. “Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine.”
Related: CARES Act May Offer Some Relief to Specialty Food Industry; SFA Risk Mitigation Webinar Recap: Managing Forward in an Unsettled Economy.
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